Canadian P2P Study Debunked

From Mathew Ingram, The Globe and Mail:

Prof. Liebowitz has been studying the impact of technology on copyright since the 1970s, when he did a study for the Canadian government looking at the effect of photocopying on the publishing industry (he concluded that it would not have an overly negative effect). He also wrote a study in 1985 looking at a new technology called the VCR, and has done research that he says shows radio also contributes to lower sales of traditional records and CDs.

On his website, Prof. Liebowitz takes issue with the study done by two researchers at the University of London, who were commissioned by Industry Canada. According to the University of Texas economist, who is also a director of the Center for the Economic Analysis of Property Rights and Innovation, the study has a number of methodological problems and also fails what he refers to as "the laugh test."

In a nutshell, Liebowitz says, the Industry Canada paper is at odds with well-established research that shows a prominent decline in CD and record sales over the past several years, a period in which the use of file-sharing software has grown dramatically. If downloading either doesn't affect CD sales or actually has a small positive effect, he says, then how can we explain that large a decline?

Liebowitz says that his own research, including a recent paper to be published in the journal Management Science, shows that "file-sharing is responsible for the entire decline in record sales that has occurred, and that except for file-sharing there would have been an increase in sales since 1999 instead of the strong decline."

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